KUALA LUMPUR: The country’s economy grew to 7.1% in first half of 2021 compared to a contraction of 8.4% in the same period last year, thanks to the effectiveness of the government’s economic stimulus and financial aid programmes, said Finance Minister Tengku Zafrul Aziz said.
“In terms of the effectiveness of the packages and measures taken, the trend of economic recovery can be seen where the country’s economy has grown to 7.1% in the first half of 2021 compared to a contraction of 8.4% in the same period in 2020,“ he said today.
In terms of direct cash assistance to Malaysians, he said the government had allocated RM33 billion, which included cash aid given to businesses, especially micro as well as small and medium entrepreneurs (SMEs) which received close to RM30 billion.
Speaking in the parliament, he said over RM330 billion or around 62% of the allocated RM530 billion under the eight government economic stimulus and financial aid programmes including fiscal and non fiscal measures have benefited a total of 20 million Malaysians and 2.4 million businesses as of Sept 24 this year.
He also pointed out that more than 66% or RM216 billion of the RM322.5 billion allocated under Budget 2021 has been spent as planned as of Sept 15.
Clarifying on the increased amount of expenditure allocated under Budget 2021, he said due to the Covid-19 outbreak, the government had to increase the spending to RM314 billion from RM297 billion which was initially presented by the former finance minister Lim Guan Eng in 2019.
“Initially Lim Guan Eng as the former finance minister under the Pakatan Harapan government in 2019 had presented a budget of RM297 billion where the deficit target is 3.2% of the Gross Domestic Product (GDP),“ he said.
“However following the Covid-19 outbreak, the government had to increase the spending to RM314 billion in that year, causing the deficit to rise to 6.2%,“ he said while adding that based on Budget 2021 the deficit is projected to be at 5.4%
He was replying to a question from Lim who wished to know the amount spent compared to the actual amount allocated since the Covid-19 pandemic hit the country and the form of finance assistance provided for the people and its benefits.
Tengku Zafrul also said that the government had taken an expansionary fiscal policy approach in facing the Covid-19 crisis.
“Therefore, the deficit for this year is expected to reach between 6.5 and 7.0 percent, “he said.
To accommodate the additional fiscal injections specifically to address Covid-19, the government had financed economic stimulus packages through the Covid-19 fund.
“As of mid-Sept 2021, the total amount spent under the fund has reached RM60 billion or more than 90 % of the fund’s current ceiling cap of RM65 billion,“ he said.
“The government will be tabling the proposal to further increase the ceiling cap for Covid-19 fund from RM65 billion to RM110 billion in order to fund the additional aid and support measures for this year and beyond,“ he said.
